Question 15 Please help to answer very important for college course Exhibit 10-2
ID: 3221345 • Letter: Q
Question
Question 15 Please help to answer very important for college course
Exhibit 10-2
Aurora is a calculator manufacturer. One of aurora’s best-selling calculator is DT920P, a dual power calculator with both solar and battery. The annual fixed costs for manufacturing the DT920P is $365,000, in addition, the total variable cost is $4.5 for each unit produced. Now the management in Aurora is considering outsourcing the production of some products for next year. They have a bid from an outside firm to produce the calculator for $6 per unit. Although it is more expensive per unit to outsource the calculator ($6 versus 4.5), the fixed cost can be avoided if Aurora purchases rather than manufactures the product.
Let us define the following:
q = quantity (number of units) required
FC = the fixed cost of manufacturing
VC = the per-unit variable cost of manufacturing
P = the per-unit variable cost of purchasing
Part of spreadsheet model is displayed following:
Refer to Exhibit 10-2. The total cost for producing q units of the calculator—TMC(q)— can be written as
TMC(q)= FC + VC *q
TMC(q) = FC*q + VC*q
TMC(q) = FC*Q + VC
TMC(q)= FC + VC
Question 16
Refer to Exhibit 10-2. The formula corresponding to the total cost for outsourcing (purchasing) q units of the calculator—TPC(q)— placed in cell B11 would be
=B4*B9+B6
=B6*B9
B4*B9+B6*B9
=B4+B6*B9
Question 17
Refer to Exhibit 10-2. For the DT920P calculator, if Aurora would like to manufacturer 10,000 units, what will be the value for B10 (TMC)?
$105,000.00
$410,000.00
$365,004.50
$425,000.00
Question 18
Refer to Exhibit 10-2. For the DT920P calculator, if Aurora would like to purchase 10,000 units, what will be the TPC ?
$410,000.00
$60,000.00
$105,000.00
$425,000.00
Question 19
Refer to Exhibit 10-2. The formula corresponding to the saving due to outsourcing placed in cell B12 would be ____, and if Aurora decide to outsourcing 10,000 units instead of manufacturing 10,000 units, what will be the value in B12 ?
=B10-B11; $350,000.00
=B10-B11; $45,000.00
=B10-B11; $206,004.50
=B10-B11; $305,000.00
Question 20
Refer to Exhibit 10-2. The break-even point (the quantity for which saving due to outsourcing is 0) can be found using Excel’s
COUNTIF function
Goal Seek tool
Data Table tool
SUMPRODUCT function
Question 21
Refer to Exhibit 10-2. The break-even point is about
$243,333
$124,333
$251,667
$169,667
A.TMC(q)= FC + VC *q
B.TMC(q) = FC*q + VC*q
C.TMC(q) = FC*Q + VC
D.TMC(q)= FC + VC
Explanation / Answer
Question 15:
The total cost for producing q units of the calculator—TMC(q)— can be written as
Ans:TMC(q) = FC*q + VC*q (option b is correct)